EDC 2014 SR (UPDATED)
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>EDC</strong> <strong>2014</strong> Performance Report<br />
“<br />
<strong>EDC</strong> is built for the future. As we patiently<br />
build toward it, we look back thankfully<br />
at the past, particularly for the confidence<br />
that you, our stockholders, have bestowed<br />
upon us especially during the recent<br />
trying times.<br />
”<br />
1<br />
RECURRING NET INCOME, AN ALL-TIME HIGH<br />
The first building block I would like<br />
to discuss is our strong ₱9.2 billion<br />
recurring net income (RNI) attributable<br />
to <strong>EDC</strong>, which is up 40% from a year<br />
ago. This was driven by the returnto-service<br />
of the 130MW Bacman<br />
power plants as well as the successful<br />
commissioning of our 49.4MW Nasulo<br />
power plant. These improvements, as<br />
well as the better performance across<br />
all geothermal business units, drove<br />
our consolidated revenues to increase<br />
by 20% to ₱30.9 billion. While our FG<br />
Hydro investment’s income declined,<br />
it was not enough to dampen the<br />
overall results of the company. Our<br />
CFO, Nestor Vasay, will discuss the<br />
changes across the business units in<br />
detail in his message to you.<br />
This significant increase in our net<br />
income is laudable at first glance<br />
but in reality, the jump should have<br />
happened sooner had we executed<br />
the Bacman power plant rehabilitation<br />
better. Be that as it may, the two larger<br />
Bacman power plant units are now<br />
operating as the most efficient in our<br />
fleet and have been upgraded to<br />
increase output to 60MW each.<br />
The other major development I would<br />
like to inform you of is our decision<br />
to lower our power rates with our<br />
customers. With the plummeting of<br />
global prices for coal and oil in <strong>2014</strong>,<br />
we took this initiative of offering lower<br />
prices, especially with respect to our<br />
contracts that will expire by end 2015<br />
and 2016. While our competitors also<br />
started lowering their prices, we were<br />
able to keep our customers after we<br />
exercised an option under our Power<br />
Supply Agreements (PSAs) to make<br />
lower-priced offers. Almost all of our<br />
customers have already chosen to<br />
continue with our services and have<br />
entered into long-term agreements<br />
with us until 2025, 2030, or even<br />
2040. These extensions are votes of<br />
confidence from our customers in our<br />
ability to supply them with reliable<br />
renewable power.<br />
Our wholly owned subsidiary Green<br />
Core Geothermal, Inc. (GCGI)<br />
amended our PSAs with Capiz<br />
Electric Cooperative, Inc., Leyte II<br />
Electric Cooperative, Inc., Leyte III<br />
Electric Cooperative, Inc., Balamban<br />
Enerzone Corporation, Visayan<br />
Electric Company, Bohol II Electric<br />
Cooperative, Inc., Aklan Electric<br />
Cooperative, Inc., Iloilo I Electric<br />
Cooperative, Inc., Iloilo II Electric<br />
Cooperative, Inc., Iloilo III Electric<br />
Cooperative, Inc., Guimaras Electric<br />
Cooperative, Inc., Central Negros<br />
Electric Cooperative, Inc., Dumaguete<br />
Coconut Mills, Inc., Negros Oriental I<br />
Electric Cooperative, Inc. and Negros<br />
Oriental II Electric Cooperative, Inc.<br />
This move will cost the company about<br />
₱911 million in the short term, but will<br />
provide stable revenue streams in the<br />
future.<br />
This page contains the following GRI indicator(s):<br />
G4-1<br />
19
Change language